Mortgages
Getting a mortgage when you're self-employed: myths explained
Building a business. Planning a home.
Your income may look different when you're self-employed, but homeownership could be closer than you think. This guide explains some common mortgage myths and what you need to know.
Can you get a mortgage if your self-employed?
Yes. Being self-employed shouldn't stop you from achieving your homeownership goals.
Whether you're just starting out on your self-employed path or have been running your own business for years, understanding your mortgage options can help you move forward with confidence.
At The Cambridge, we understand that being self-employed looks different for everyone. From freelancers and contractors to sole traders and company directors, we're here to help you understand what's possible and support you every step of the way.
In this guide, we'll bust some common myths about self-employed mortgages and answer some of the questions we hear most often.
Book an appointment today to discuss your options.
Myth 1: I can't get a mortgage because I'm self-employed
The reality: Yes you can!! This is one of the biggest misconceptions we hear.
Being self-employed shouldn't stop you from achieving your homeownership goals. Whether you're a sole trader, freelancer, contractor, company director or business partner, there may be mortgage options available to suit your circumstances.
At The Cambridge, we understand that being self-employed looks different for everyone. That's why we take the time to understand your income and help you explore what's possible.
Myth 2: I need years of accounts before I can get a mortgage?
The reality: At The Cambridge, we'll usually ask self-employed applicants for at least two years' accounts, along with supporting tax documentation.
If you have two years of accounts, you can apply for a mortgage with us, subject to affordability and our usual lending criteria.
The best way to understand your options is to speak to one of our mortgage advisers, who can explain the documentation we'll need and discuss your circumstances.
Myth 3: My income is too complicated
The reality: Self-employed income doesn't always look like a regular monthly salary, and that's okay.
Whether you're a sole trader, freelancer, contractor, company director or business partner, the key is being able to provide evidence of your income.
We'll usually ask for:
- The last two years' SA302 tax calculations
- Tax year overviews
- Two years' full financial accounts for limited companies and partnerships (in certain circumstances)
- Recent bank statements
- Proof of identity and address
If you complete your Self Assessment online, you can usually download your SA302 tax calculation and Tax Year Overview from HMRC, or obtain them through your accountant. These documents may sometimes be referred to as a tax computation.
It's also worth bearing in mind that reducing your taxable income can affect how much income you're able to evidence when applying for a mortgage. If homeownership is one of your future goals, it's worth discussing this with your accountant.
Myth 4: Those that are self-employed always pay higher mortgage rates
The reality: Being self-employed doesn't automatically mean you'll pay a higher mortgage rate.
Mortgage rates are influenced by a range of factors, including your deposit, credit history, the amount you'd like to borrow and your overall circumstances.
The most important thing is understanding what options may be available to you. If you're unsure where you stand, our mortgage advisers are here to help. They'll take the time to understand your circumstances, answer your questions and help you explore the options available.
Myth 5: My income has changed, so I won't be able to get a mortgage
The reality: Changes in income don't automatically mean you can't get a mortgage.
Self-employed income can fluctuate from year to year, and lenders understand that this can be part of running a business.
At The Cambridge, we'll take the time to understand your circumstances and review the information provided as part of your application before discussing the options that may be available to you.
How can I improve my chances of getting a mortgage if I'm self employed?
While every mortgage application is different, there are a few things that can help:
- Maintain a good credit history
- Keep existing borrowing under control
- Build a deposit where possible
- Understand what you can comfortably afford
- Speak to a mortgage adviser before you apply
Being self-employed doesn't automatically make getting a mortgage harder. We simply want to understand your income, spending and ability to keep up with repayments.
How can I improve my chances of getting a mortgage if I'm self employed?
While every mortgage application is different, there are a few things that can help:
- Maintain a good credit history
- Keep existing borrowing under control
- Build a deposit where possible
- Understand what you can comfortably afford
- Speak to a mortgage adviser before you apply
Being self-employed doesn't automatically make getting a mortgage harder. We simply want to understand your income, spending and ability to keep up with repayments.
Ready to discuss your mortgage options?
Whether you're a sole trader, freelancer, contractor, company director or business partner, our Mortgage Advisers can help you understand what may be possible based on your individual circumstances.
If you're thinking about applying for a self-employed mortgage, book an appointment to discuss your options.
You can also visit our Help Centre for more information about buying a home and applying for a mortgage.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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